"I like to win, but more than anything, I can't stand the idea of losing. Because to me, losing means death."
Most of us don't like losing. In fact, it's what the academics call loss aversion. We feel the pain of loss more acutely than we feel the pleasure of gain. In other words, we may like to win, but we hate to lose.
The loss aversion was first convincingly demonstrated by Amos Tvresky and Daniel Kahneman. In prospect theory, loss aversion refers to the tendency for people to strongly prefer avoiding losses than acquiring gains. Some studies suggest that losses are as much as twice as psychologically powerful as gains.
Under this state of mind, we may make stupid
decisions, especially on personal finance. Can we realize this and overcome
this? Changing perspective, could be one of the
solution.
Read on this article from nytimes...
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